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Why Not Abolish the Welfare State?

Subsidizing the Breakup of Families

The percentage of children in single-parent homes has more than tripled in the last three decades, growing from 9.1 percent in 1960 to 28.6 percent in 1991. 48 Children not born to single mothers arrive in the single-parent households by means of their parents' divorce or separation. And the welfare system is a major reason why. Nearly half of all entrants into AFDC are the result of the breakup of the family. [See Figure VI.] Liberalized eligibility and increased benefits have enabled women to raise children without husbands. The real constant value of assistance, including housing and Medicaid benefits, jumped from $600 per month to $1,200 per month from 1965 to 1975. 49 Even well-intentioned fathers experiencing long periods of unemployment have concluded that the best way to provide for their children was to dissolve their marriages so their families could qualify for assistance. As jobs have left the inner cities, this conclusion has been increasingly reached by the black poor. 50

Some of the strongest evidence for a powerful effect of welfare on marriage comes, once again, from the SIME/DIME experiments. In response to a guaranteed income, divorce increased 36 percent among whites and 42 percent among blacks. 51 Another study by the General Accounting Office (GAO) focused on what happened to the behavior of people when welfare benefits were reduced. 52 In 1981, the Reagan administration tightened eligibility rules for AFDC. The new rules made it more difficult for the less needy to get benefits and led to about 500,000 fewer AFDC recipients per year. A large number of welfare mothers throughout the country lost their AFDC benefits, and more than half of them also lost food stamp benefits.

The GAO study focused mainly on welfare mothers who were earning a private income before and after losing their AFDC benefits. The study showed that approximately two years after losing AFDC benefits:

  • On the average, welfare mothers had increased the number of hours they worked, were commanding a higher hourly wage and overall had significantly increased their real earned income.
  • In Boston, 43 percent of the welfare mothers had as much or more total income after losing their welfare benefits as they had before. (Their average real income from working increased 25 percent.)

Not only did the welfare mothers who lost AFDC benefits respond by changing their work behavior, they also reacted to the loss of welfare benefits by making important changes in their family lives.

  • Two years after losing AFDC benefits, a significant number of welfare mothers had increased their family size by at least one adult.
  • In Syracuse, 19 percent did so and in Dallas, 22 percent did so.

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